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`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`PPG HOLDCO, LLC,
`Plaintiff /
`Counterclaim-Defendant,
`v.
`RAC PPG BUYER LLC,
`Defendant /
`Counterclaim-Plaintiff.
`
`
`C.A. No. 2025-0240-EMD
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`DEFENDANT / COUNTERCLAIM-PLAINTIFF RAC PPG BUYER LLC’S
`ANSWERING BRIEF IN OPPOSITION TO PLAINTIFF /
`COUNTERCLAIM-DEFENDANT PPG HOLDCO, LLC’S
`MOTION FOR JUDGMENT ON THE PLEADINGS
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`OF COUNSEL:
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`Michael P. Conway
`Elsa Andrianifahanana
`Shea F. Spreyer
`JONES DAY
`110 North Wacker
`Suite 4800
`Chicago, IL 60606
`(312) 782-3939
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`Dated: August 14, 2025
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`POTTER ANDERSON & CORROON
`LLP
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`Jaclyn C. Levy (#5506)
`Nicole K. Pedi (#6236)
`Nina N. Monzack (#7356)
`1313 N. Market Street, 6th Floor
`Hercules Plaza
`Wilmington, DE 19801
`(302) 984-6000
`jlevy@potteranderson.com
`npedi@potteranderson.com
`nmonzack@potteranderson.com
`
`Attorneys for Defendant/Counterclaim-
`Plaintiff RAC PPG Buyer LLC
`REDACTED PUBLIC VERSION
`E-FILED: AUG. 22, 2025
`EFiled: Aug 22 2025 09:45AM EDT
`Transaction ID 76913713
`Case No. 2025-0240-EMD
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`TABLE OF CONTENTS
`Page
`INTRODUCTION .................................................................................................... 1
`FACTUAL BACKGROUND ................................................................................... 3
`I. PRIOR TO CLOSING, THE COMPANY FACED A HOST OF
`PERVASIVE LABOR AND EMPLOYMENT ISSUES WHICH
`WERE NOT DISCLOSED ............................................................................. 3
`A. Undisclosed Union Organizing Activity and Unfair Labor
`Practice Charge ..................................................................................... 4
`B.
`C.
`D.
`E.
`II. SELLER KNOWINGLY PREPARED AND DELIVERED A
`FRAUDULENT PRE-CLOSING STATEMENT TO BUYER ..................... 8
`III. SELLER’S FRAUDULENT PRE-CLOSING STATEMENT
`CORRUPTED THE PURCHASE PRICE ADJUSTMENT PROCESS ....... 9
`LEGAL STANDARD ............................................................................................. 10
`ARGUMENT .......................................................................................................... 12
`I. BUYER’S REQUEST FOR RECISSION BARS SELLER’S
`REQUEST FOR JUDGMENT ON ITS CONTRACTUAL CLAIMS ........ 12
`II. GENUINE DISPUTES OF MATERIAL FACT PRECLUDE
`JUDGMENT ON SELLER’S CLAIMS ...................................................... 14
`III. SELLER CANNOT USE UNFOUNDED INTERPRETATIONS OF
`THE SPA TO SHIELD ITS FRAUD AND BAD FAITH ........................... 19
`A. The SPA Provides a Clear Recourse for Buyer to Assert Actual
`Fraud Claims Pertaining to Seller’s Pre-Closing Statement .............. 19
`B. The SPA’s Survival and Release Provisions Do Not Bar
`Buyer’s Fraud Defense and Counterclaim ......................................... 22
`IV. SELLER’S REQUEST TO BE NAMED THE “PREVAILING
`PARTY” UNDER SECTION 8.19 OF THE SPA IS REFUTED BY
`DELAWARE LAW ...................................................................................... 26
`CONCLUSION ....................................................................................................... 27
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`ii
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`TABLE OF AUTHORITIES
`Cases Page
`26 Cap. Acquisition Corp. v. Tiger Resort Asia Ltd.,
`309 A.3d 434 (Del. Ch. 2023) ............................................................................ 18
`Abry P’rs V, L.P. v. F & W Acquisition LLC,
`891 A.2d 1032 (Del. Ch. 2006) .......................................................................... 12
`AQSR India Priv., Ltd. v. Bureau Veritas Hldgs., Inc.,
`2009 WL 1707910 (Del. Ch. June 16, 2009) ...................................................... 15
`Artisans’ Bank v. Seaford IR, LLC,
`2010 WL 2501471 (Del. Super. June 21, 2010) ................................................. 11
`Bank of Del. v. Allstate Ins. Co.,
`448 A.2d 231 (Del. Super. 1982) ........................................................................ 16
`Baugh v. Ingle,
`2025 WL 1466036 (Del. Ch. May 21, 2025) ...................................................... 27
`Blue v. Tilray Brands, Inc.,
`2025 WL 519848 (Del. Ch. Feb. 17, 2025) ........................................................ 25
`Branin v. Stein Roe Inv. Couns., LLC,
`2014 WL 2961084 (Del. Ch. June 30, 2014) ...................................................... 16
`Carsonaro v. Bloodhound Techs., Inc.,
`65 A.3d 618 (Del. Ch. 2013) .............................................................................. 12
`Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC,
`27 A.3d 531 (Del. 2011) ..................................................................................... 11
`Charter Commc’ns Operating, LLC v. Optymyze, LLC,
`2021 WL 1811627 (Del. Ch. Jan. 4, 2021) ......................................................... 27
`Columbus US Inc. v. Enavate SMB, LLC,
`2024 WL 5274569 (Del. Super. Dec. 23, 2024) ................................................. 17
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`iii
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`Cook v. Fusselman,
`300 A.2d 246 (Del. Ch. 1972) ............................................................................ 18
`Cooper Tire & Rubber Co. v. Apollo (Mauritius) Hldgs. Pvt. Ltd.,
`2013 WL 5787958 (Del. Ch. Oct. 25, 2013) ...................................................... 26
`Darling Ingredients Inc. v. Smith,
`2023 WL 8533204 (Del. Ch. Dec. 11, 2023)...................................................... 20
`Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P.,
`624 A.2d 1199 (Del. 1993) ..................................................................... 10, 11, 14
`DuPont De Nemours, Inc. v. Hemlock Semiconductor Operations LLC,
`2024 WL 3161799 (Del. Super. June 10, 2024) ................................................. 16
`Emmett S. Hickman Co. v. Emilio Capaldi Developer, Inc.,
`251 A.2d 571 (Del. Super. 1969) ........................................................................ 14
`Ger v. Kammann,
`504 F. Supp. 446 (D. Del. 1980) ......................................................................... 13
`Graulich v. Dell Inc.,
`2011 WL 1843813 (Del. Ch. May 16, 2011) ...................................................... 11
`Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLLP,
`2014 WL 6703980 (Del. Ch. Nov. 26, 2014) ..................................................... 14
`GreenStar IH Rep, LLC v. Tutor Perini Corp.,
`2017 WL 5035567 (Del. Ch. Oct. 31, 2017) ................................................ 11, 15
`IP Network Sols., Inc. v. Nutanix, Inc.,
`2022 WL 369951 (Del. Super. Feb. 8, 2022) ..................................................... 16
`Jiménez v. Palacios,
`250 A.3d 814 (Del. Ch. 2019) ............................................................................ 11
`Kainos Evolve, Inc. v. InTouch Techs., Inc.,
`2019 WL 7373796 (Del. Ch. Dec. 31, 2019)...................................................... 13
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`Kilcullen v. Spectro Sci., Inc.,
`2019 WL 3074569 (Del. Ch. July 15, 2019) ...................................................... 14
`L-5 Healthcare P’rs, LLC v. Alphatec Hldgs., Inc.,
`2020 WL 6021536 (Del. Ch. Oct. 12, 2020) ...................................................... 27
`Lillis v. AT & T Corp.,
`904 A.2d 325 (Del. Ch. 2006) ............................................................................ 14
`Manti Hldgs., LLC v. Authentix Acquisition Co., Inc.,
`261 A.3d 1199 (Del. 2021) ................................................................................. 25
`Matrix Parent, Inc. v. Audax Mgmt. Co., LLC,
`319 A.3d 909 (Del. Super. 2024) ........................................................................ 21
`Matthew v. Laudamiel,
`2012 WL 2580572 (Del. Ch. June 29, 2012) ...................................................... 16
`MPT of Hoboken TRS, LLC v. HUMC Holdco, LLC,
`2014 WL 3611674 (Del. Ch. July 22, 2014) ...................................................... 11
`Nicastro v. Rudegeair,
`2007 WL 4054757 (Del. Ch. Nov. 13, 2007) ..................................................... 18
`Norton v. Poplos,
`443 A.2d 1 (Del. 1982) ....................................................................................... 13
`Online HealthNow, Inc. v. CIP OCL Invs., LLC,
`2021 WL 3557857 (Del. Ch. Aug. 12, 2021) ............................................... 21, 23
`Osborn ex rel. Osborn v. Kemp,
`991 A.2d 1153 (Del. 2010) ................................................................................. 25
`Pac. Ins. Co. v. Liberty Mut. Ins. Co.,
`956 A.2d 1246 (Del. Super. 2008) ...................................................................... 24
`Pazos v. AdaptHealth LLC,
`322 A.3d 492 (Del. Super. 2024) ........................................................................ 20
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`v
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`Pearce v. NeueHealth, Inc.,
`2024 WL 3421900 (Del. Super. July 15, 2024) .................................................. 25
`Physiotherapy Corp. v. Moncure,
`2018 WL 1709731 (Del. Ch. Apr. 6, 2018) ........................................................ 16
`Pike Creek Recreational Servs., LLC v. New Castle Cnty.,
`238 A.3d 208 (Del. Super. 2020) ........................................................................ 26
`Premier Tech. Advisors, LLC v. Procure IT LLC,
`2024 WL 4904707 (Del. Super. Nov, 15, 2024) ................................................ 17
`Ravenswood Inv. Co., L.P. v. Estate of Winmill,
`2018 WL 1410860 (Del. Ch. Mar. 21, 2018) ..................................................... 12
`Terrell v. Kiromic Biopharma, Inc.,
`297 A.3d 610 (Del. 2023) ................................................................................... 20
`Xu Hong Bin v. Heckmann Corp.,
`2009 WL 3440004 (Del. Ch. Oct. 26, 2009) ...................................................... 18
`STATUTES
`10 Del C. § 6506 ...................................................................................................... 15
`RULES
`Ct. Ch. R. 10(c) ........................................................................................................ 11
`Ct. Ch. R. 12(c) ........................................................................................................ 11
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`Defendant / Counterclaim-Plaintiff RAC PPG Buyer LLC (“Buyer”) files this
`Answering Brief in Opposition to Plaintiff / Counterclaim-Defendant PPG Holdco,
`LLC (“Seller”) Motion for Judgment on the Pleadings (the “Motion”) and
`respectfully requests that the Court deny the Motion for the reasons stated herein.
`INTRODUCTION
`Seller engaged in brazen fraud against Buyer but, through its Motion, asks the
`Court to grant it immunity. Prior to Closing, Seller intentionally concealed pervasive
`labor and employment-related issues at the Company, distorting the Company’s
`financial statements by
` In connection with the Closing, the Stock Purchase Agreement
`(“SPA”) required Seller to prepare and deliver a Pre-Closing Statement1 to Buyer
`setting forth good faith estimates of the Company’s working capital and overall
`financial position. This good faith obligation was a foundational element to ensure
`the purchase price adjustment was sound, as the Pre-Closing Statement triggered
`tight timetables to finalize the Purchase Price after the Closing.
`Instead of disclosing the Company’s significant and material issues, all of
`which were well-known to Seller, Seller prepared and delivered a fraudulent Pre-
`Closing Statement to Buyer that
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`1 All capitalized terms not otherwise defined herein shall have the meanings assigned
`to them in the SPA or Buyer’s Answer to Verified Complaint (“Answer”) and
`Verified Counterclaim (“Counterclaim” or “Countercl.”), respectively.
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`This fraudulent
`statement set a flawed post-Closing purchase price adjustment process in motion and
`put Buyer on the clock to prepare a Closing Date Statement no later than 90 days
`after the Closing. In doing so, Buyer relied on Seller’s fraudulent and bad faith
`calculations and false attestation that the Company’s financial statements were
`accurate. Buyer’s Closing Date Statement was therefore tainted by Seller’s fraud
`and included grossly inaccurate calculations resulting in an adjustment in Seller’s
`favor. Seller quickly and opportunistically accepted that adjustment before Buyer
`discovered the fraudulent scheme’s impact on the working capital process.
`Seller now requests that the Court grant it judgment on the pleadings and
`compel Buyer to pay an unfounded adjustment generated by its own fraudulent
`conduct. That request is improper for a host of reasons. First, it ignores the bedrock
`principle that judgment on the pleadings is inappropriate where, as here, there are
`numerous material factual disputes underpinning the claims and defenses standing
`in the way of a resolution of Seller’s claim. Second, Seller’s Motion is also directly
`contrary to Delaware’s longstanding refusal to enforce contractual provisions
`procured or implemented through fraudulent conduct. In fact, Seller’s fraud was so
`pervasive that it entitles Buyer to rescission of the contract, rendering it void ab initio
`and barring Seller’s claim for relief. Third, even setting the issue of rescission aside,
`Buyer’s defenses would vitiate Seller’s claims under Delaware law. Seller cannot
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`rely on unfounded interpretations of the SPA to shield its fraud and bad faith.
`Accepting Buyer’s well-pled defenses and Counterclaim as true, as the Court must
`at this juncture, Seller’s Motion must be denied.
`FACTUAL BACKGROUND
`Buyer disputes Seller’s misleading characterization of factual background in
`its Opening Brief (“OB”), which selectively omits Buyer’s denials and well-pled
`allegations set forth in its defenses and Counterclaim.
`2
` Specifically, Buyer expressly
`disputes and adds additional context to the relevant facts as follows.
`I. PRIOR TO CLOSING, THE COMPANY FACED A HOST OF
`PERVASIVE LABOR AND EMPLOYMENT ISSUES WHICH WERE
`NOT DISCLOSED
`Prior to Closing in 2024, the Company faced a host of significant labor and
`employment-related issues, including undisclosed union organizing efforts, an unfair
`labor practice charge filed by a former employee,
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`(Countercl. ¶ 4.) These issues not only
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`but also created inaccuracies in the Company’s financial
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`2
` Buyer asserted eight defenses in its Answer and incorporated by reference the
`allegations set forth in Buyer’s Counterclaim in support of those defenses. (See
`Answer at 28-32.) Buyer filed its First Amended Verified Counterclaim on August
`13, 2025, adding additional allegations and claims based on newly discovered
`breaches of representations and warranties pertaining to
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`statements, including the balance sheet components at the core of Seller’s claim
`relating to the post-Closing purchase price adjustment. (
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`Id.
` ¶ 5.)
`A. Undisclosed Union Organizing Activity and Unfair Labor
`Practice Charge
` The Company encountered union organizing activity, including meetings and
`authorization card signing, as early as June 2024. ( Id. ¶ 49.) As Buyer alleges in
`detail, this activity was repeated and pervasive throughout the remainder of 2024 but
`was never disclosed. (
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`Id.
` ¶ 50-53.) This organizing activity led to an unfair labor
`practice charge filed pre-Closing alleging efforts by the Company to suppress union
`activity, never disclosed by Seller and
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`(Id. ¶ 51.) This significant union organizing activity was well-known by
`Seller and high-level personnel at the Company prior to Closing, including those
`designated as “Knowledge Parties” in the SPA. (Id. ¶¶ 16, 63.) Emails uncovered
`after Closing reveal that
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`discussed these frequent and escalating incidents of
`employee organizing, going so far as to retain counsel to advise the Company on the
`threat posed by this activity. (
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`Id.
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`II. SELLER KNOWINGLY PREPARED AND DELIVERED A
`FRAUDULENT PRE-CLOSING STATEMENT TO BUYER
`On August 15, 2024, Buyer and Seller entered into the SPA. (Id. ¶ 1.) Instead
`of disclosing the Company’s above-described labor and employee relations issues to
`Buyer, Seller deliberately concealed these issues during the sale process and made
`several knowing misrepresentations in the SPA and in Seller’s Pre-Closing
`Statement. (Id. ¶¶ 5-6, 8-10, 60-63, 70-74, 85-89, 95-99, 105-107, 111-112; Answer
`at 28-29.) Critically, as Seller knew, these issues rendered the Company’s financial
`statements and the Pre-Closing Statement grossly inaccurate by
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`(Countercl. ¶¶ 111-112, 162-164.)
`As part of the sale process, Seller prepared and delivered a Pre-Closing
`Statement to Buyer. (
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`Id.
` ¶ 160.) In Section 2.4(a) of the SPA, Seller attested that
`the Pre-Closing Statement it had delivered to Buyer included “good faith” estimates
`of Cash, Working Capital, Closing Indebtedness, Seller Transaction Expenses, and
`the resulting Initial Purchase Price. (Id. ¶¶ 109-110.) Seller not only failed to meet
`this “good faith” standard required by the SPA, but also acted fraudulently by
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`delivering a Pre-Closing Statement that was knowingly and materially inaccurate.
`(Id. ¶¶ 111-112, 150.)
`Seller’s fraudulent conduct destroyed the integrity of the post-closing
`purchase price adjustment process. ( Id. ¶¶ 6, 113-114, 151.) The “good faith”
`requirement was a critical foundational element to the purchase price adjustment
`process, as Seller’s good faith estimates triggered Buyer’s contractual obligation to
`deliver a Closing Date Statement based on the Pre-Closing Statement framework no
`later than 90 days after the Closing Date. (Id. ¶¶ 6, 109.) When it decided to engage
`in fraud, Seller made it impossible for the rest of the steps of the purchase price
`adjustment process to proceed in an accurate, fair, and timely manner. ( Id. ¶¶ 113-
`114, 151.)
`III. SELLER’S FRAUDULENT PRE-CLOSING STATEMENT
`CORRUPTED THE PURCHASE PRICE ADJUSTMENT PROCESS
`The skewed foundation set by Seller’s fraudulent Pre-Closing Statement
`corrupted the post-Closing purchase price adjustment process set forth in Section 2.4
`of the SPA. ( Id. ¶¶ 6, 112-114.) After Seller delivered its false Pre-Closing
`Statement calculations to Buyer, Buyer was required to quickly prepare and deliver
`its Closing Date Statement to Seller within 90 days after the Closing as required by
`the SPA. (Id. ¶ 114.) At that time, Buyer had not discovered the magnitude or impact
`of Seller’s bad faith breaches and fraudulent conduct on the Pre-Closing Statement,
`and unknowingly relied on false Company financial records manipulated by Seller
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`prior to Closing to fulfill its obligations. (
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`Id.
`¶¶ 114, 165.) As the intended result of
`Seller’s fraudulent scheme, Buyer delivered a flawed Closing Date Statement that
`was tainted and reflected an adjustment in Seller’s favor, which Seller quickly and
`opportunistically accepted before Buyer discovered the magnitude of Seller’s fraud.
`(
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`Id.
`¶ 114.) Had Seller acted truthfully and in accordance with the contract by
`delivering a good faith Pre-Closing Statement, which would have accurately
`accounted for
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`the calculations in Buyer’s
`Closing Date Statement would have been significantly different and the Final
`Purchase Price would have required a payment from Seller to Buyer. (Id.)
`Seller filed its Verified Complaint (“Complaint” or “Compl.”) on March 5,
`2025, seeking to enforce a purchase price adjustment in its favor directly flowing
`from its own fraud. On April 29, 2025, Buyer answered Seller’s Complaint, asserted
`eight defenses to Seller’s claims grounded in fraud and other applicable doctrines,
`sought rescission, and asserted counterclaims for fraud and breach of contract with
`respect to Seller’s false representations and warranties in the SPA and bad faith Pre-
`Closing Statement.
`LEGAL STANDARD
`“A motion for judgment on the pleadings may be granted only when no
`material issue of fact exists and the movant is entitled to judgment as a matter of
`law.” Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P ., 624
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`A.2d 1199, 1205 (Del. 1993); Ct. Ch. R. 12(c). This standard is “stringent,”
`requiring the moving party to “show that there are no issues of material fact in
`existence.” Artisans’ Bank v. Seaford IR, LLC, 2010 WL 2501471, at *2 (Del. Super.
`June 21, 2010). The Court may review complaints, counterclaims, answers, and
`affirmative defenses, as well as documents attached to or incorporated by reference
`into the pleadings, without converting the motion into a Rule 56 motion. Jiménez v.
`Palacios, 250 A.3d 814, 827 (Del. Ch. 2019), as revised (Aug. 12, 2019), aff’d, 237
`A.3d 68 (Del. 2020); Graulich v. Dell Inc., 2011 WL 1843813, at *4 (Del. Ch. May
`16, 2011); Ct. Ch. R. 10(c).
`When the plaintiff moves for judgment on its own claims under Rule 12(c),
`the Court “generally must accept the non-moving party’s denials as fact,” “accept[]
`the non-moving party’s well-pled allegations as true,” and “view the facts pleaded
`and the inferences to be drawn from such facts in a light most favorable to the non-
`moving party.” GreenStar IH Rep, LLC v. Tutor Perini Corp., 2017 WL 5035567,
`at *5 (Del. Ch. Oct. 31, 2017), aff’d, 186 A.3d 799 (Del. 2018); MPT of Hoboken
`TRS, LLC v. HUMC Holdco, LLC, 2014 WL 3611674, at *5 (Del. Ch. July 22, 2014);
`Desert Equities, Inc., 624 A.2d at 1206. “[U]nless the non-moving party ‘could not
`recover under any reasonably conceivable set of circumstances susceptible of
`proof,’” then the motion must be denied. MPT, 2014 WL 3611674, at *5 (quoting
`Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC , 27 A.3d 531, 536
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`(Del. 2011)); Carsonaro v. Bloodhound Techs., Inc ., 65 A.3d 618, 636 (Del. Ch.
`2013) (describing the reasonably conceivable standard as “minimal”), abrogated on
`other grounds by El Paso Pipeline GP Co., L.L.C. v. Brinckerhoff , 152 A.3d 1248,
`1264 (Del. 2016).
`ARGUMENT
`I. BUYER’S REQUEST FOR RECISSION BARS SELLER’S REQUEST
`FOR JUDGMENT ON ITS CONTRACTUAL CLAIMS
`Seller’s request that the Court grant it judgment on the pleadings and compel
`Buyer to pay a purchase price adjustment under Section 2.4 of the SPA is barred by
`Buyer’s pending request for rescission of the SPA in its Counterclaim. Under
`Delaware law, a party that has been fraudulently induced into entering an agreement,
`as Buyer alleges here, may pursue rescission as an equitable remedy to disaffirm the
`contract in its entirety, rendering the instrument void ab initio, as equity will not
`permit the defrauding party to retain the fruits of a fraudulently induced bargain. See
`Abry P’rs V , L.P . v. F & W Acquisition LLC, 891 A.2d 1032, 1064 (Del. Ch. 2006)
`(finding Delaware law “will not permit the Seller to insulate itself from the
`possibility that the sale would be rescinded if the Buyer can show either: 1) that the
`Seller knew that the Company’s contractual representations and warranties were
`false; or 2) that the Seller itself lied to the Buyer about a contractual representation
`and warranty.”); Ravenswood Inv. Co., L.P . v. Estate of Winmill, 2018 WL 1410860,
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`at *21 (Del. Ch. Mar. 21, 2018), as revised (Mar. 22, 2018), aff’d, 210 A.3d 705
`(Del. 2019); Norton v. Poplos, 443 A.2d 1, 4-7 (Del. 1982).
`Seller’s fraud was so pervasive that Buyer seeks rescission of the SPA in its
`Counterclaim. (See Countercl. ¶¶ 17, 46, 126, 142, at 87 (requesting rescission on
`account of Seller’s fraud); Answer ¶¶ 48, 57, at 28-29 (denying Seller’s allegations
`that the SPA is a valid and binding contract because it was procured by Seller’s fraud
`and pleading that Buyer is entitled to rescission of the SPA and to have the provisions
`of the SPA governing the purchase price adjustment process rendered void and
`unenforceable).) Thus, by seeking rescission, Buyer has put the continuing validity
`and enforceability of the SPA at issue in electing to pursue a remedy that, if granted,
`would extinguish every contractual right Seller purports to enforce in its claims. 3
`See, e.g., Ger v. Kammann, 504 F. Supp. 446, 448 (D. Del. 1980) (“The effect of the
`‘rescission’ of a contract is to extinguish it for all purposes, not only to preclude the
`recovery of the contract price but also to prevent the recovery of damages for breach
`of the contract.”) (applying Delaware law) (quoting Hyman v. Cohen, 73 So.2d 393,
`397 (Fla. 1954)). Consequently, because Buyer’s fraud Counterclaim and request to
`rescind the SPA remain in play, Seller’s Motion must be denied. See, e.g., Kainos
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`3 Seller seeks judgment on Count I (Specific Performance), Count II (Breach of
`Contract), Count III (Declaratory Judgment), and Count IV (Award of Attorney’s
`Fees and Expenses) of its Complaint, all of which are rooted in contract under the
`SPA.
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`Evolve, Inc. v. InTouch Techs., Inc. , 2019 WL 7373796, at *5 (Del. Ch. Dec. 31,
`2019) (declining to address availability of rescission as a remedy at the pleading
`stage due to the “fact-intensive inquiry” required to determine its application); Great
`Hill Equity P’rs IV , LP v. SIG Growth Equity Fund I, LLLP, 2014 WL 6703980, at
`*29 (Del. Ch. Nov. 26, 2014) (finding it “inappropriate” to dismiss a party’s
`requested rescission remedy at the pleading stage because “whether rescission is
`available properly involves a fact-specific inquiry.”).
`II. GENUINE DISPUTES OF MATERIAL FACT PRECLUDE
`JUDGMENT ON SELLER’S CLAIMS
`In addition to ignoring Buyer’s request for rescission, Seller’s Motion also
`disregards numerous material factual disputes that control the resolution of its claims
`and Buyer’s defenses, precluding judgment on the pleadings. See Desert Equities,
`Inc., 624 A.2d at 1205; Kilcullen v. Spectro Sci., Inc., 2019 WL 3074569, at *8 (Del.
`Ch. July 15, 2019); Lillis v. AT & T Corp ., 904 A.2d 325, 329-30 (Del. Ch. 2006)
`(providing Rule 12(c) is a proper framework for enforcing unambiguous contracts
`only when there is no need to resolve material disputes of fact).
`First, Seller’s own allegations concede that Seller’s performance of its
`obligations under the SPA is an essential element of its affirmative claims. ( See
`Compl. ¶¶ 49, 58.); Emmett S. Hickman Co. v. Emilio Capaldi Developer, Inc., 251
`A.2d 571, 573 (Del. Super. 1969) (finding that “in order to recover damages for any
`breach of contract, plaintiff must demonstrate substantial compliance with all the
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`provisions of his contract.”); AQSR India Priv., Ltd. v. Bureau Veritas Hldgs., Inc.,
`2009 WL 1707910, at *7 (Del. Ch. June 16, 2009) (noting “the party seeking specific
`performance must have substantially performed the contract [itself]”). Seller’s
`Motion, however, ignores the fact that Buyer expressly denies that Seller performed
`its obligations and, in fact, affirmatively alleges that Seller breached those
`obligations. (Answer ¶¶ 49, 58, at 31; Countercl. ¶¶ 6, 108-114, 150-151, 161-170.);
`GreenStar IH Rep, LLC , 2017 WL 5035567, at *2 (noting a court must accept the
`non-moving party’s “denials” and “well-pled facts” in its answer and counterclaims
`as fact when considering a Rule 12(c) motion)). Accepting the denials and well-pled
`allegations in Buyer’s Answer and Counterclaim as true, as the Court must at this
`stage, Seller did not perform all of its obligations under the SPA—it breached
`Section 2.4 by preparing and delivering a fraudulent and bad faith Pre-Closing
`Statement to Buyer, corrupting the purchase price adjustment process. ( Id.) The
`“good faith” question is inherently factual in itself, further underscoring the
`numerous and genuine disputes of fact requiring denial of Seller’s Motion.4 See
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`4 Buyer’s well-pled Counterclaim also renders Seller’s request for judgment on its
`declaratory judgment claim (Count III) premature. Under 10 Del C. § 6506, courts
`are specifically empowered to “refuse to render or enter a declaratory judgment or
`decree where such judgment or decree, if rendered or entered, will not terminate the
`uncertainty or controversy giving rise to the proceeding.” Courts decline to enter
`declaratory judgments in these circumstances, recognizing that it would “have the
`effect of trying the controversy piecemeal” or lead to the parties “try[ing] particular
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`Branin v. Stein Roe Inv. Couns., LLC, 2014 WL 2961084, at *10 (Del. Ch. June 30,
`2014) (denying motion for judgment on the pleadings when motion turned on “a
`material factual dispute” concerning whether a party acted in good faith).
`Buyer’s well-pled allegations of prior material breach standing alone require
`the Court to deny Seller’s motion. Delaware courts consistently recognize prior
`breaches such as the Seller’s as a valid defense to contract claims. Physiotherapy
`Corp. v. Moncure, 2018 WL 1709731, at *1 (Del. Ch. Apr. 6, 2018); IP Network
`Sols., Inc. v. Nutanix, Inc. , 2022 WL 369951, at *10 (Del. Super. Feb. 8, 2022)
`(denying motion for judgment on the pleadings where prior material breach defense
`was adequately pled and factual issues remained as to whether such alleged prior
`breach occurred and was material). Consequently, the assertion of this defense by
`Buyer requires denial of Seller’s Motion because additional facts are necessary to
`determine whether Seller materially breached the SPA in failing to provide a “good
`faith” statement—a disputed fact issue. See Matthew v. Laudamiel, 2012 WL
`2580572, at *10 (Del. Ch. June 29, 2012); DuPont De Nemours, Inc. v. Hemlock
`Semiconductor Operations LLC , 2024 WL 3161799, at *9 (Del. Super. June 10,
`2024) (rejecting Rule 12(c) motion on plaintiff’s contract claim where defendant
`alleged that plaintiff’s “prior material breach of the [contract] supersedes its own
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`issues without settling the entire controversy.” Bank of Del. v. Allstate Ins. Co., 448
`A.2d 231, 235 n.2 (Del. Super. 1982).
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`breach” because “given the present factual disputes, including an alleged breach’s
`materiality, sending [the] action to discovery [was] the most appropriate result.”).
`Buyer’s defense and affirmative claim of fraud is also sufficient in itself to
`deny Seller’s Motion, as this inherently factual defense would vitiate Seller’s
`contract claims. Columbus US Inc. v. Enavate SMB, LLC, 2024 WL 5274569, at *14
`(Del. Super. Dec. 23, 2024) (denying motion for summary judgment where “[t]here
`[was] a triable issue as to [defendant’s] affirmative defense of fraud and what effect,
`if any, that defense would have on [plaintiff’s] breach of contract claim.”); id. (noting
`“an award of damages on [defendant’s] counterclaims would serve to decrease or
`totally offset any amount owed to [plaintiff]. If [defendant] prevails at trial on all its
`remaining counterclaims and its fraud defense, the amount that it owes to [plaintiff]
`under the APA could be swallowed up by the damages that it is granted after trial.”);
`Premier Tech. Advisors, LLC v. Procure IT LLC , 2024 WL 4904707, at *11 (Del.
`Super. Nov, 15, 2024) (“Because Buyers’ affirmative defense of fraud is well-pled,
`granting summary judgment on Sellers’ breach claim is inappropriate.”).5
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`5 Seller’s argument that Buyer cannot “use unliquidated, inchoate claims for alleged
`breaches of representations and warranties” to “setoff” the purchase price adjustment
`is misplaced. ( See OB at 13.) While it is true that a party generally cannot use
`unliquidated indemnification claims to setoff a liquidated claim, Buyer’s well-pled
`fraud defense and Counterclaim, if proven, provide grounds for recission and would
`render Section 2.4 of the SPA unenforceable against Buyer.
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`Buyer’s other well-pled defenses also require denial of Seller’s Motion. See,
`e.g., Xu Hong Bin v. Heckmann Corp., 2009 WL 3440004, at *13 (Del. Ch. Oct. 26,
`2009) (denying plaintiff’s Rule 12(c) motion where defendant “asserted numerous
`affirmative defenses to enforcement of the [contract] in its answer” including
`fraudulent inducement and unclean hands, and where “a sufficient factual record has
`not been developed to determine the efficacy, if any, of these defenses.”). Buyer’s
`defenses, including unclean hands, raise issues that would bar Seller’s recover